Detroit inks benefits agreement with general city employee association

By Caroline Salls

Pittsburgh, May 2 - The City of Detroit reached an agreement on the treatment of pension and health care benefits with the association representing retired Detroit general city employees, according to a news release from city employees' representative Lippitt O'Keefe Gornbein, PLLC.

Specifically, the firm said the Detroit Retired City Employees Association (DRCEA) reached an agreement with the city regarding its proposed Chapter 9 plan of adjustment.

"We believe this is a favorable deal under the current situation and it further clears a path for the city to emerge from bankruptcy," Lippitt O'Keefe managing partner Brian O'Keefe said in the release.

Under the agreement, the city retirees will experience a 4.5% cut in current pension benefits, as well as a loss of cost-of-living-allowances, which can be restored depending on the performance of the General Retirement System under the plan of adjustment.

Retirees will also have a "meaningful voice" in governance of the General Retirement System and of a Voluntary Employees Beneficiary Association (VEBA) that is to be established.

According to the release, the DRCEA is the city's largest employee association with almost 8,000 members, or roughly 75% of Detroit's eligible general retirees.

Detroit filed for bankruptcy on July 18, 2013 in the U.S. Bankruptcy Court for the Eastern District of Michigan under Chapter 9 case number 13-53846.

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